Estate planners to debate do-it-yourself wills, trusts

Estate planners to debate do-it-yourself wills, trusts

on October 5, 2011

Good article in Palm Beach Daily news By DIAN VUJOVICH on the debate on Do-it-yourself wills and trusts

Estate planners to debate

do-it-yourself wills, trusts

By DIAN VUJOVICH

When Google gets involved with something, you know it’s big. Take the do-it-yourself online wills and trusts business, for instance. Given that more people don’t have wills or trusts than do, it’s no surprise Google whose mission statement reads “to organize the world’s information and make it universally accessible and useful” saw an opportunity. After all, crafting final wishes is something everyone needs to do.

But before telling that story, National Estate Planning Awareness Week is Oct. 17-23. Part of what is to be discussed by the pros during that week will be DIY online wills and trusts.

“It’s an area of concern,” says Jo Ann Englehardt, managing director of Bessemer Trust in Palm Beach.

Even the least encumbered life can become complicated with respect to property, assets, retirement accounts, life insurance, children, step-children, friends, pets and more. While appealing, making a DIY will or trust isn’t necessarily simple, nor is it always appropriate. For some it can be a fit. For others, no. For still others, it’s a good start.

The market

A July 2011 survey from EZLaw, an online document creation service, found only 44 percent of Americans had a will or estate planning documents in place. However, 60 percent of those surveyed thought that all adults should have a will or estate plan.

So why don’t we do what we think we should when it comes to wills and estate planning? For openers, it’s a deadly subject.

“It’s uncomfortable to think about,” says Gideon Rothschild, a partner with the law firm of Moses & Singer L.L.P. in New York who specializes in estate planning and asset protection. “But that same fear of mortality issue exists in our society. That’s why people don’t go to their lawyers to do wills until they are typically in their 60s when they should have had a will all along.”

Aside from not wanting to think about mortality, the EZLaw survey cited other reasons people don’t want to plan:

■ 18 percent of respondents thought making a will or estate planning was not necessary.

■ 16 percent thought it was too complicated.

■ 14 percent found doing so too expensive.

■ 13 percent believed their spouse and/or children would automatically receive assets they have.

■ 6 percent thought the process was too time-consuming.

The expense of it all

Hiring a seasoned and professional wills, trusts and estate attorney to draft your documents can be costly.

While the national average for attorney’s fees is in the $300 an hour range, in Palm Beach or New York City, the cost for well-drafted wills, trusts and estate plans will likely run many multiples of that amount.

On the other hand, a DIY will or trust can be had on the cheap.

On LegacyWriter.com, for instance, prices for a last will and testament begin at $19.95 (the site does not provide trust forms). At LegalZoom.com, a will costs about $69.

At RocketLawyer.com, for $19.95 you can purchase one month of access to attorneys who will review your documents. Pony up about $100 and RocketLawyer.com will gives you access to attorney review for a year. The charge for a Last Will and Testament at this site? Free.

This is where Google comes in: In August, Google Ventures was part of a group that invested $18.5 million in Rocket Lawyer. According to Rocket Lawyer’s founder, Charley Moor, the site has 70,000 users a day and revenues of more than $10 million.

So reviewing legal documents and dying are growing businesses.

Some flags

There’s nothing inherently wrong with using an online service to create a DIY will or trust provided the final document meets your needs and is in proper order.

When creating a simple will, for instance, witnesses and a notary are necessary. Forget either and, upon your death, that simple DIY will purchased online won’t be valid.

“My biggest fear for any individual who chooses to create DIY documents is good intentions,” says Englehardt. “With the best of intentions and a do-it-yourself will, an individual can hurt the family members, friends, or charities he or she most wants to benefit.”

Englehardt said that by having an effective will and trust, individuals can dispose of their assets and protect loved ones from predators and creditors, often while minimizing taxes and protecting benefits such as Supplemental Security Income.

“The peace of mind that comes with having documents prepared by someone who knows the right questions to ask and has the right training to do the job correctly is incalculable,” says the Barnard College graduate.

Rothschild echoes her concerns and points out that using DIY wills, trust and estate documents aren’t that dissimilar to DIY doctoring. “Diagnosing an illness without the proper tools to do so can be dangerous, “ he said.

DIY wills can provide a fine solution if your estate isn’t likely to face any tax complications, for instance, or you don’t expect anyone to challenge the will or trust you’ve created.

But if your estate is valued at $5 million or more, and involves things such as employee benefit plans, under-aged disabled children with special needs, disabled parents, nursing home concerns and appreciated assets of any kind, the DIY route isn’t likely to be prudent or wise.

The go-ahead

DIY wills and documents do have their place. Aside from offering a low-cost venue for a variety of life-planning needs, they can be educational tools as well as cover potential end-of-life emergency needs.

Use an online service to create a will and the resulting document can be used to cover your immediate bases, as well as provide a stepping stone for the future if you decide to seek out an attorney to create or update your will and trust documents.

Englehardt said DIY trusts can also be used in an emergency or urgent situation — for instance when facing unplanned surgery — when no other planning documents exist or existing ones don’t say what the individual wants them to say.

“Ideally, the trust would be revocable, so proper planning could take place after the emergency or urgent situation had passed,” she added. “And this is no better or worse than a holographic (handwritten) will, which is designed to be used in similar situations.”

If you like the idea, and costs, of taking the DIY approach but worry whether all bases are covered, spend a few hundred dollars more to have a trusted attorney review it.

Whether you choose the DIY approach or hire an attorney, be careful not to confuse an attorney’s value and hourly rates. It’s their expertise you’ve really hired. And a seasoned wills, trusts and estate attorney knows it’s in the asking of questions where the details of a well-honed document are crafted.

The grand finale

In the end it’s your wishes and their execution that matter most. So whether you convey those wishes via a DIY document or by hiring an experienced attorney, it’s all about making your point and limiting your risks.

“At the end of the day, if the will or trust is written in an ambiguous fashion and there is any degree of uncertainly as to what you meant, then it is likely to wind up in the court system,” said Rothschild, who is also an adjunct professor at the University of Miami School of Law Graduate Program.

“And if it goes to court, No. 1, you are going to pay a lot more in legal fees than what you saved by doing it yourself. And No. 2, it’s going to be sitting in the courthouse for months if not years before the litigation is settled. So what are the major risks? The costs of correcting any errors after you die — and the delays (in settling the estate) — that you’re risking by doing it yourself.”

Then again, those risks exist whether you’ve created an inexpensive DIY document creating a will or trust.

If only life were really simple and passing on didn’t require documents, what sweet repose we’d all enjoy.